By Kathryn Alfisi
In
March Bread for the City held a groundbreaking ceremony to mark the
start of its $8 million expansion project on 7th Street NW to accommodate
more low-income District of Columbia residents in need of food, clothing,
medical care, and social and legal services.
The event, attended by D.C. Congresswoman Eleanor Holmes Norton and Councilmember David Catania (At-Large), highlighted the significant partnerships made possible by the D.C. Bar Pro Bono Program through its Community Economic Development (CED) Project.
Bread for the City aims to add 12,000 square feet of space to its existing building, an undertaking that does not come cheaply, especially for a local nonprofit with limited resources. Like many community nonprofits, Bread for the City had to be creative in looking for funding sources. Thus, it might seem incongruent that the organization managed to secure the legal counsel of DLA Piper LLP, one of the world’s largest law firms.
This is where the CED Project provides critical help. It matches community-based nonprofits with law firms that can best address their business and transactional legal needs. It also assists small businesses in the District with its Small Business Initiative.
Both sides benefit from the program, which was started in 1999. By acting as general counsel for nonprofit organizations, transactional attorneys have the opportunity to get involved in pro bono projects that utilize their skill set, while nonprofit groups receive help from top-notch law firms that otherwise they would never be able to afford.
In 2008 the CED Project matched 49 nonprofit groups with pro bono counsel and, through its Small Business Initiative, held eight clinics, including its first Spanish language clinic, that assisted 140 clients.
The CED Project was born during turbulent economic times not unlike today, when local nonprofits were seeing their funding sources dry up while the need for community assistance continued to grow.
“At the time that the project was being considered, D.C. was broke and there was a lot of need among community service providers and not many programs that could offer any help,” said Pro Bono Program Director Maureen Thornton Syracuse.
As local nonprofits battled significant funding cuts, the Pro Bono Program (then called the D.C. Bar Public Service Activities Corporation) started receiving more calls from law firms asking if any pro bono work was available for their tax and corporate attorneys.
“This made us realize that there was a big potential resource we had not tapped into,” Syracuse said.
That realization came at a time when the District’s largest law firms had started hiring more transactional attorneys than ever before; there was not, however, enough nonlitigation pro bono work to go around.
“There are not many pro bono projects out there that focus on this type of work, and there especially weren’t [any] 10 years ago when we started the CED Project. In the past, D.C.’s largest law firms mostly did litigation and federal regulatory work, but that’s changed during the last 15 or 20 years and we now have a much bigger corporate presence at the firms,” Syracuse said.
Of course, there’s nothing to prevent a transactional attorney from working on and enjoying more traditional pro bono work, but for some tax or real estate attorneys, the thought of stepping into a courtroom can be somewhat terrifying.
“I’ve been a transactional lawyer for 34 years and [with most pro bono projects] there is an element of stepping outside of your comfort zone,” said George Covucci, a partner at Arnold & Porter LLP and chair of the CED Project’s Advisory Committee.
According to Covucci, one of the greatest benefits of the CED Project from a law firm’s point of view is that it allows mid-level associates the opportunity to “cut their teeth.” Associates learn how to take control of a project, develop a relationship with a client, and develop their skill set, all while under the supervision of a partner or counsel at the firm.
But while it hasn’t been difficult finding law firms that want to participate in the CED Project, it’s a different story when it comes to nonprofit organizations.
“Many of these organizations are in the ‘let’s just get through today’ mode of thinking. We try to tell them that a lot of their problems would be made easier if they had a lawyer, but you have to invest time upfront. And then you have people who have problems and don’t know they have problems,” CED Project Director Regina Hopkins said.
Covucci voiced similar sentiments. “These groups often don’t realize the number of legal issues they could confront, or the potential ramifications of not dotting the i’s and crossing the t’s,” he said. “There are a number of potential risks, including personal liability for failing to pay payroll taxes to the [Internal Revenue Service] IRS. You have to make sure you have in place the proper indemnifications, the proper officer, and director insurance that protect individuals who are participating in a nonprofit and acting in good faith.”
Nonprofits that do reach out to the CED Project are received with a comprehensive staff effort to find and match them with law firms that will result in successful and lasting partnerships. There’s the firm’s level of expertise and experience to consider, as well as its main interests, and then there is, according to Hopkins, “an intangible element” to making a good match.
To give a better understanding of the work of the CED Project, Washington Lawyer is featuring the stories of some of these partnerships.
DLA Piper and Bread for the City
As with most nonprofits, Bread for the City had to be diligent and creative
in raising $8 million to fund its expansion project.
The District of Columbia Primary Care Association (DCPCA) awarded Bread for the City approximately $4 million in grant money as part of its Medical Homes DC program, which seeks to provide consistent and quality medical care to low-income District residents.
Since the grant only covered half of the project’s cost, Bread for the City had to come up with a way to finance the rest. The organization’s health care finance consultant, Capital Link, Inc., suggested using new market tax credits.
New market tax credits were enacted as part of the 2000 Tax Relief Act as a way to encourage investment in low-income communities. Taxpayers receive tax credit if they invest in the funds of a privately managed investment institution (also called community development entities), which in turn invests in low-income businesses and facilities.
While Bread for the City had found a funding source, it needed legal counsel to navigate the complicated world of new market tax credits. (The organization did receive some legal advice through Sutherland Asbill & Brennan LLP and Pillsbury Winthrop Shaw Pittman LLP.)
In late 2007, upon the advice of DCPCA, Bread for the City sought the assistance of the CED Project and was matched with DLA Piper. The firm has a partner in its Baltimore office, Stephen Sharkey, who is an expert in new market tax credit deals.
David Krohn, a partner at DLA Piper’s Washington, D.C., office, also became involved in the project.
“As a finance lawyer, usually my ability to do pro bono requires me to do something outside of my area of expertise, so when the D.C. Bar called me up and said that they had this complicated financing for Bread for the City and asked if I could help, I was thrilled and happy to find out that we had the necessary expertise,” Krohn said.
“It’s really an exciting project. One of the nice things about doing financing work for construction like this is that Bread for the City can use every dollar to serve its basic mission as opposed to paying interest on borrowings, and the end result is highly valuable to the community.”
Bread for the City Executive Director George Jones was equally excited to work with DLA Piper.
“It has gone fantastically,” he said. “David Krohn and Stephen Sharkey have provided great legal counsel and advice regarding the various complexities of the new market tax credits we are using in our project. They have made presentations to our board and even loaned us space so that we could host some of our donors. They were and continue to be a great source of support.”
Jones is confident that the city’s Shaw neighborhood, where the Bread for the City building is located, will benefit from improvement with the help of DLA Piper.
Once the expansion is completed (Jones said construction started in May and is expected to be finished about a year later), the facility is expected to more than double its current client capacity. The centerpiece of the expansion is the medical center, which will feature 12 new exam rooms and more space for legal and counseling services.
“This has been a longtime dream for Bread for the City, to take this 9,500-square foot facility and expand it so that we can maximize the property that we own and do more good work in the neighborhood,” Jones said.
Thanks in part to the CED Project, that dream has finally come true.
Arnold & Porter and My Sister’s Place
My Sister’s Place, like Bread for the City, wants to expand the
size of its facility to better address its clients’ needs. The
organization provides shelter, education, programs, and advocacy for
battered women and their children.
“There’s a dearth of shelter beds for battered women in the District. There’s always been more need than there are resources, which is why the expansion is important,” My Sister’s Place Executive Director Nichelle Mitchem said.
The organization began working on the expansion, which would increase its shelter beds from 22 to 45, in 2004. During this period, individuals, corporations, and the District government came together to raise funds, and an architect and a general contractor were hired. But Mitchem soon realized that what My Sister’s Place really needed was a general counsel.
One day in 2007, in what Mitchem said seemed like divine intervention, she was cleaning her desk and going through piles and piles of paper when she found a flyer she had received about the CED Project. Mitchem contacted the D.C. Bar Pro Bono Program to inquire about the CED Project and, before long, My Sister’s Place was matched with Arnold & Porter LLP.
“There was such a rapid response from them, and they put a lot of thought into who could best address our needs in a comprehensive and holistic way,” Mitchem said.
One of the things that delayed the expansion was stalled negotiations with the project architect. The fear was that My Sister’s Place would have to find another architect, which would only further set back the process. That scenario was avoided when Arnold & Porter partner Gary Humes stepped in and successfully completed the negotiation.
“Gary was so fabulous. He did it in such a short time and had the patience of Job,” Mitchem said.
Leasing transactions were mostly handled by real estate attorney Kathryn Olson, of counsel at Arnold & Porter. Olson helped relocate My Sister’s Place to a temporary residence until the construction work is complete.
Olson, along with Humes and two other Arnold & Porter attorneys who worked on the project, David Goldblatt and Matthew Keiser, handled general real estate work for My Sister’s Place such as leasing transactions and architect and contractor agreements. The same team of attorneys also dealt with employment issues and some corporate matters, and it assisted the organization in working with the city government.
As of April, the expansion project was put on hold due to lack of public funding for housing, but the fundraising has continued and Arnold & Porter remains as the organization’s counsel.
According to Olson, the partnership is not that different from her relationship with paying clients.
“I don’t treat them any differently than I would another client. Like the other cases I deal with, my work with My Sister’s Place is a long-term relationship that requires me and others to handle problems as they come up,” Olson said.
This isn’t Olson’s first foray into transactional pro bono work. She also is working on a Tenant Opportunity to Purchase Act (TOPA) case for the CED Project. The act gives tenants the right of first refusal to purchase a building whenever the landlord wants to sell it to a third party. The case Olson is handling is fairly new and involves a 39-unit building in Columbia Heights.
“It’s great when you can take something that you do every day and that you have a real expertise in and put it to a different use,” Olson said.
McDermott Will & Emery and the D.C. Primary Care Association
The D.C. Primary Care Association (DCPCA) may have given Bread for the
City a helping hand, but when it came to putting together one of its
own complicated projects, DCPCA was the one that needed help.
DCPCA represents primary care providers for the uninsured and advocates for systemic change of the health care system in the District so that all residents have access to medical services.
In an effort to improve patient care, DCPCA implemented an electronic health records (EHR) project at six community health centers (Bread for the City, Family and Medical Counseling Service, Inc., La Clínica del Pueblo, Mary’s Center for Maternal and Child Care, So Others Might Eat, and Whitman-Walker Clinic) so that health care providers would have better access to patients’ clinical information.
By the time the project was completed in late 2008, DCPCA had started thinking beyond electronic health records and onto creating a regional health information organization (RHIO).
“We saw that there was no interconnectivity and operability, and that this clearly was a huge issue in the health system,” DCPCA Chief Executive Officer Sharon Baskerville said.
A RHIO is a group of health care organizations dedicated to improving the quality and efficiency of health care delivery within a defined geographic area.
DCPCA received a $6 million public grant to form a RHIO, and Baskerville and others started putting together a three-year work plan to connect with and get agreements from as many appropriate entities as it could afford. The first plan of business was to connect the six health care centers that have EHRs with some of the District’s hospital emergency rooms.
In preparation for this initiative, Baskerville studied RHIOs from across the country and found that many have failed due to massive legal fees. To avoid that problem, Baskerville contacted the D.C. Bar Pro Bono Program, which she had worked with before, and asked if there was any firm with expertise on RHIOs. That firm turned out to be McDermott Will & Emery LLP.
Heidi Echols, a partner in the firm’s Chicago office with extensive knowledge of RHIOs, is leading the DCPCA project. In April, Echols received the National Public Service Award from the Pro Bono Committee of the American Bar Association’s Section of Business Law for her work with DCPCA.
“I knew I had struck gold in terms of the level of expertise available [to us],” Baskerville said.
McDermott Will & Emery has been advising the organization on strategies, tax issues, and the best structural way to handle things related to the project.
“We’re juggling a lot of legal issues at the same time,” Echols said. They include state and federal privacy and security laws that govern the exchange of patient information, contractual issues, core health information technology issues, and policy issues.
Baskerville said she didn’t expect to have so many signed agreements at only about a year-and-a-half into the project, an achievement she attributes to the work of Echols and her firm.
“We’re up there with the big guys now because we have money and we’ve made dramatic progress, partly because of the level of legal expertise that we have,” Baskerville said.
Baskerville also praised Echols for taking on the project as if it was her own, instead of just providing legal advice from time to time. She said Echols has spent hours talking on the phone with her, making sure that she “got it.”
“It was important to have Heidi help us on the policy and procedural perspective, and on data sharing and making sure that there’s [Health Insurance Portability and Accountability Act] HIPAA compliance and security. She also helped us create a project that provides protection and streamlines things and makes it easier for a lot of entities to participate,” Baskerville said.
Echols also finds that there is not a lot to distinguish her pro bono work from her regular work. In her case, it means developing policies, working on developing contracts, and assessing client risks and regulatory obligations.
This has been Echols’ first experience working on a transactional pro bono case and it has been a positive experience—not only does she get to help an organization like DCPCA, she also has gained skills she can utilize in her day-to-day work.
The active partnership between DCPCA and McDermott Will & Emery will continue for quite some time as, in the words of Baskerville, “the project is enormous.”
“I don’t know if we ever really finish a project like this; we can finish stages, we can finish the set-up, and we can set up the pilot, but as long as there’s a project like this going on and there are health information exchanges, whoever is facilitating those will need legal counsel,” Echols said.
Not that she minds the work that lies ahead. “For me, while the other pro bono work I do is also rewarding, this is something I can get so invested in because it’s what I do on a daily basis and I’m able to be invested in the project from start to finish as opposed to just a small component,” she said.
Arent Fox and Achievement Prep
In 2008 the charter school Achievement Preparatory Academy (Achievement
Prep) opened its doors in Southeast to students from grades four through
eight.
Achievement Prep was started by former Pillsbury Winthrop Shaw Pittman attorney Shantelle Wright. Wright took part in a year-long fellowship program offered by the national nonprofit Building Excellent Schools, in which aspiring charter school leaders study and visit the highest performing charter schools in the country and learn about starting, running, and maintaining a charter school.
As an attorney herself, Wright realized early on that she would need legal assistance to get the school up and running. She received some initial help from her former firm, but Wright said she “knew that we would need a firm that knew us as an organization and could support us through the whole process; I knew I was going to need to formalize a true partnership.”
Wright had worked with the D.C. Bar Pro Bono Program before, so right after the charter school was approved, she sought the assistance of the CED Project. Arent Fox LLP was chosen to partner with Achievement Prep because of its previous experience working with charter schools.
Wright was particularly impressed by her initial meeting with Arent Fox that was attended by a firm partner, senior associate, and junior associate, as well as a representative from the Pro Bono Program. During the meeting Wright laid out the various legal needs of Achievement Prep.
“I felt like the firm was really attentive and really cared about what we needed. The firm also helped me think through what my additional needs might be and how it might be able to match them. The attorneys also shared how they might be able to help us with board work or with governance and they made us think through more than just employment policies, but what are some of our school policies that could result in any legal liability. They just really opened my eyes in that conversation,” Wright said.
Andrew Udin, an associate at the New York office of Arent Fox, handled the real estate aspect of the project by helping Achievement Prep negotiate a sublease for space in an existing school.
“I’ve worked on a number of pro bono projects, but this one in particular struck home personally with me because the school I attended while growing up in the Bronx was what I guess you’d classify as high need, which is what Achievement Prep is. Also my wife taught at a school in Brooklyn in what was then considered one of the worst areas of New York City. So just seeing someone like Shantelle take time to put together a school like this I thought was great,” Udin said.
Udin also put Wright in touch with employment law specialists who worked with her to prepare the school’s student handbook, personnel policies, and employment policy. Wright was always included in the process, whether that meant soliciting feedback on the handbooks or discussing the lease.
“The firm really tried to figure out what Achievement Prep is and what we wanted, and what we wanted our employment culture to look like,” she said.
Now that Achievement Prep is operational, there are no immediate legal issues to deal with, but Wright still considers Arent Fox to be the school’s counsel.
“We’re this small school over in Ward 8 with high poverty and low-income students, and we have a multimillion-dollar firm serving us—that’s huge,” Wright said.
“From my point of view as a former attorney who is now on the other side and part of a nonprofit that doesn’t have any money, the CED Project is absolutely invaluable.”
D.C. Bar staff writer Kathryn Alfisi recently wrote the cover story,
“Language Barriers to Justice,” which appeared in the May
issue of Washington Lawyer.
